Abengoa Bioenergy Receives Short Term Bankruptcy Financing to Pay Wages

by San Antonio Attorney

The subsidiary office of Abengoa SA, Abengoa Bioenergy US Holding LLC, recently received interim financial aid to pay wages and maintain operations while processing its reorganization plan under the Chapter 11 bankruptcy filing, according to the court ruling last Wednesday.

The company filed for bankruptcy protection last week and the lawyers have stated that the guarantor will have more than $6 billion in total liabilities for the debt restructuring.

Kathy Suratt-States,a U.S. Bankruptcy Judge gave approval to the debtor in possession on ‘an interim basis’.  This was done over objections of the grain suppliers who were owed money by Abengoa Bioenergy.  The grain suppliers’ concern was that the income would eventually land in Spain.

The judge’s ruling has paved the way for Abengoa Bioenergy to have a debt of $7 million right away and will possibly return to court at a later time to plead for financing.

The grain suppliers such as Gavilon Grain, the Farmers Cooperative Association, The Andersons Inc and Central Valley Ag expressed their woes through the court documents that the U.S. satellite office was making cash and loan transaction to the main headquarters in Spain.

Richard Chesley, a lawyer that represents Abengoa Bioenergy, immediately clarified this issue.

Chesley said that the bank accounts in Spain are now closed and the cash is closely controlled by the company.

It is not only the grain suppliers who demand to where the cash went; the DIP lender has the same concerns.

Abengoa SA is trying to negotiate an agreement with the banks and bondholders by March 28, the same time that the company is at risk for an insolvency process and will be considered as Spain’s largest corporate failure.

Abengoa recently appointed a former associate into the company last Tuesday to take over as new chairman to initiate debt restructuring.

Leave a Comment

Previous post:

Next post: